Government plan to end the public sector pay cap

Plans are being drawn up to end the seven-year cap on public sector pay for some state employees, such as nurses and newly qualified teachers, according to a report by the Financial Times.

To immediately end the cap for all 5m state workers would cost about £4bn a year, a heavy price tag at a time of continued government austerity. As a result, a final announcement of changes to public sector pay, expected when Liz Truss, chief secretary to the Treasury, sends guidance letters to pay review bodies this month, is likely to stop short of a sudden scrapping of the existing cap, and may only apply to some workers in some sectors.

Independent pay review bodies, which advise the government on public sector salaries, have reported increasing problems with recruitment and retention, especially for the NHS and schoolteachers, in recent years.

Scotland’s First Minister has confirmed that the 1% cap on public sector pay rises in Scotland will be scrapped next year, says BBC News. Nicola Sturgeon reportedly told the Scottish Parliament that nurses, teachers, police officers and firefighters deserve a fairer deal for the future.

She said: "We will, therefore, aim to secure pay rises from next year that are affordable, but which also reflect the real-life circumstances our public servants face and the contribution our public services make to the overall prosperity of our country."